T.C. Memo. 2003-103
UNITED STATES TAX COURT
NORMAN L. AND CATHERINE J. FORSTE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 12393-00. Filed April 16, 2003.
Following P’s assertion of numerous tort and
nontort causes of action, P and his employer entered
into a settlement. P excluded from gross income
$45,615 that he received from his former employer under
the settlement agreement. P claims that this amount is
excludable under sec. 104(a)(2), I.R.C., as damages
received on account of personal injuries and that the
burden of proof is on R pursuant to sec. 7491, I.R.C.
Held: Under sec. 7491(a)(1), I.R.C., if the
taxpayer produces credible evidence as to any factual
issue relevant to his tax liability, the burden of
proof as to that issue shifts to the Commissioner.
What constitutes a relevant factual issue for purposes
of sec. 7491, I.R.C., is determined on the basis of the
circumstances of the particular case and the relevant
law. The factual issue in this case is what amount, if
any, of the $45,615 P received pursuant to the
settlement agreement was paid as damages for tort or
tort type personal injury claims. P produced credible
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